Long Term Equity Allocation Reduced
From 1990 to 1997, Kevin Haggerty served as Senior Vice President for Equity Trading at Fidelity Capital Markets, Boston, a division of Fidelity Investments. He was responsible for all U.S. institutional Listed, OTC and Option trading in addition to all major Exchange Floor Executions. For a free trial to Kevin’s Daily Trading Report, please click here.
The SPX finished last week -0.4 to 1104.49 after bouncing (or being manipulated) off the 1086 low on Thursday. Either way, it was a positive because in terms of economic data it was probably the worst week this year.
Yesterday the SPX opened the month at +1.0 to 1115.71, which is not a surprise because of the early seasonal first week positive bias. February started the same way when the SPX went +1.4 and +1.3 for the first two days, and then reversed and made the 1044.50 low that week in the key price and time zone.
NYSE volume declined to 967mm shares yesterday versus 1.25 billion shares at month end on Friday. The volume ratio was 82, breadth ratio 79, and net advance-declines at +1795 The QQQ led the major indexes yesterday at +1.6, and that is a positive not only because of the seasonal bias for Tech, but in order for the SPX to take out 1150.45 it will take leadership from Technology, Industrial, and Consumer Discretionary sectors because it is not coming from the Financials.
The SPX futures are +7 points as I complete this at 8:47AM, so the SPX 1121 .50RT level to 1576 from 667 will be challenged today. The key Fib RT levels are always in play in both directions. The .707RT to 1150.45 from 1044.50 is 1119.41, and the .786RT 1127.78, so 1120-1128 is now the key resistance zone. There is also a cluster of time symmetry that started yesterday, and goes through March 9, and when you get both together there is usually a tradable market reaction.
However, regardless of what the market does here I will sell another 5% of the long term index proxy position bought in Feb/March 2009 into the 1121 zone today, and that leaves me with a 45% position after having sold 55% of the original position on the previous run-up to the 1121-1150 zone.
Have a good trading day.
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